Read more: Governor, Department of Insurance mandate insurer rebates
But the CFA believes that insurers can do more to compensate drivers, especially since the pandemic-driven lockdowns have led to drastically reduced driving activity and less roadside collisions – while insurers continued to charge regular rates.
“They are sitting on this coronavirus windfall, and they need to give it back,” CFA national insurance expert Doug Heller told MLive.
Crash data collected by the Michigan State Police found that there were 13,930 crashes in the state in March this year. This represents a 60% year-over-year reduction from the 23,088 crashes recorded in March 2019. The months of April and May also saw their crash numbers reduce by 40% and 52%, respectively, year-over-year.
So far, only one insurer in Michigan has planned to lower rates based on projected declines in vehicle miles driven and accidents – State Farm. The company will be lowering its rates on top of the 25% credit it gave policyholders on premiums paid from March 20 to May 31.
A spokesperson told MLive that State Farm is planning a 12.7% average rate reduction for its 1.1 million customers in Michigan, resulting in savings estimated at $173 million.
In April, the DIFS announced that it had approved auto insurance rate filings that exceeded state law-mandated reductions. The rate filings were in response to the changes the state made to its no-fault auto insurance laws.
Read more: MI insurance regulator approves auto rate reductions that exceed government expectations
Michigan has some of the highest auto insurance rates in the US, and legislators passed a reform bill last year to address the issue. The reforms change the no-fault auto insurance laws, allowing drivers to choose their level of Personal Injury Protection (PIP) benefits, and thus also allowing insurance companies to adjust their rates to account for their customers being able to select PIP benefits.
But with driving activity and collision frequency dropping during the pandemic, Heller believes that the previously approved rates are likely higher than they should be, citing State Farm’s further rate reduction as proof.
“Every single company that sells a new auto insurance policy starting July 02 will be overcharging their customers, because we’re just not causing accidents as much as we used to in the pre-pandemic world,” the CFA executive director said.
Heller added that insurers “have an obligation to adjust since the world has changed, and DIFS has an obligation to ensure they adjust.”
"auto" - Google News
June 26, 2020 at 01:03PM
https://ift.tt/3hWVZcO
Consumer advocate calls for auto insurers to provide more premium relief - Insurance Business
"auto" - Google News
https://ift.tt/2Xb9Q5a
https://ift.tt/2SvsFPt
Bagikan Berita Ini
0 Response to "Consumer advocate calls for auto insurers to provide more premium relief - Insurance Business"
Post a Comment